uzCkES SECTION
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL RATE AND FEE CHANGES,
1667 :
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Jcr 3 3 08pj/ ‘97
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Docket N,.$&f.~
PARCEL SHIPPERS ASSOCIATION
MOTION TO COMPEL
RESPONSE TO INTERROGATORY
PSAIUSPS-T37-IO(a)
TO USPS WITNESS VIRGINIA J. MAYES
“~~:~($;~~;
and (b)
Parcel Shippers Association (“PSA”) files this Motion to Compel in response to
the USPS Objection to Interrogatory PSANSPS-T37-IO(a)
and (b), tIleId September 29,
1997. The text of the interrogatory in question follows:
PSAIUSPS-T37-IQ.
Your Response to PSANSPS-T37-8
that the Test Year Alaska non-preferential air costs are
$106,437,000.00 both before and after-rates.
states
Would it be correct, in order to replicate the
(4
Commission-approved
treatment of these Alaska non-preferential
air costs, to subtract $106,437,000.00 from the total parcel post
costs as shown in the Test Year after-rates costs in witness
Patelunas’ testimony? If the response is anything other than an
unqualified affirmative, please explain any qualification.
Based on your response to this interrogatory, and your
(b)
response to POIR 1(a) (2) that the calculation of the TYAR cost
coverage, as shown at page 3 of WPI.I.C., uses as its base ,the
total T/AR costs for Parcel Post with contingency, including
intra-Alaska non-preferential air costs, please calculate and
supply the ‘P/AR cost coverage for parcel post after subtracting
the $106,437,000.00 of Alaska non-preferential air costs?
This question asks witness Mayes to confirm whether it would be correct to
replicate Commission-approved
treatment of Alaska non-preferential air costs by
subtracting those costs from the Test Year after-rates costs presented in the Postal
Service’s filed testimony; part (b) requests the Postal Service to provide the TYAR cost
coverage for parcel post after subtracting the Alaska non-preferential air costs that, in
accordance with previous Commission decisions, were deemed to be institutional costs
and not properly attributable to parcel post.
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The Postal Service objects to the question maintaining that neither the letter nor
the spirit of Rule 54(a)(l) dealing with alternate cost presentations of the Commission’s
costing methodology requires that it make such calculations. The Postal Service pleads
as support for its position the extensive motion practice it engaged in in order to avoid
faithful compliance with Rule 54(a)(l). In ruling on several of those motions the
Commission found that the Postal Service had “exhibited a tone which reflects an effort
to conduct this case in a cooperative, rather than adversarial manner,“’ a finding
contradicted by the Postal Service’s months long refusal to supply a rellatively simple
and uncomplicated piece of information which they alone possess: the Test Year
nonpriority Alaskan air costs which the Postal Rate Commission has previously deemed
to be nonattributable to parcel post. The Postal Service knows the number; it would
require no massive involvement of people or computers to provide it. It is simply a case
of the Postal Service exhibiting a staunch adversarial posture.
The Postal Service also maintains that the answers that it has slJpplied do not
mean what they seem to mean. PSA first asked witness Mayes to supply the total
amount of Alaska non-preferential air costs that are shown as a part of the TYBR and
TYAR costs for parcel post. Witness Mayes responded (PSA/USPS-T37-13) by stating
that witness HatGeld’s filed testimony “reports Test Year Alaska non-pref air costs of
$106,437(000).”
She further stated that it was her understanding that those were the
Test Year Before Rates costs. To the request that she also supply TYAR costs she
responded simply by saying that it was her further “understanding that there is no
separate TYAR or TYBR distribution key in the rollforward model for Al:aska non-pref air
costs, so the TYAR share of total Domestic Airmail costs that is Alaska non-pref is the
same as the TYBR share, which in turn comes from the base year share.“’ PSA took
this to mean that there was no difference between the Before and After-Rates costs.
But the USPS objection denies that witness Mayes stated that Test Ye;ar Alaska
non-pref air costs were the same “both before and after rates.” If that i:s not the
meaning of what witness Mayes stated in the quoted language, then wle confess we do
not know what it means; moreover, if it is not the meaning of witness Mayes’ response,
then her answer was nonresponsive because she was supposed to supply the Test
1
Footnote 3 of the Presiding Officer’s Ruling No. R97-I/8. The Commission also
found that the provision of a table of relative mark ups reflecting then a’vailable cost
information “.
should have provided effective notice to participants that the new cost
attribution methods proposed by the Postal Service in this case could Ggnificantly
impact the rates recommended by the Commission and further should lhave provided
some indication of how those proposed methods might impact on speclitic subclasses of
mail.” Whether that is true or not in the case of the impact of “new cost: attribution
methods,” the Postal Service’s attribution of the Alaska non-pref costs is not new;
moreover, because of the overall impact of other cost attribution changes in this case,
the indices provided does not isolate the effect of attribution of non-pref Alaska air costs
so as to provide any true measure of the impact of that attribution on parcel post.
1
Does anyone know what that actually means?
-2m4100
Year After-Rates costs as well as Test Year Before-Rates costs. At best the answer is
an obfuscation that prevents the discovery of admissible and relevant evidence.
This controversy is unrelated to the other issues in this case arising out of the
Postal Service’s new costing methodologies.
Rather, this is simply the obstinate refusal
of the Postal Service to acquiesce in repeated rulings of the Postal Rate Commission
that these Alaska air costs are not to be attributed to parcel post, It is rnore than an
annoyance that the parties, as well as the Commission, are put to the trouble of trying
to decipher from a mountain of data the concealed Alaska air costs that are not to be
attributed.
The appropriate cost coverage for parcel post is very much an issue in this
proceeding, as it always has been, because,of the extreme price senskivity of parcel
post. The attribution of more than $100 million of costs improperly to parcel post utterly
distorts the reported cost coverages and deflects the attention of the parties and the
Commission from a true focus on what actual cost coverage is being proposed by the
Postal Service. In the end, presumably the Commission itself will obtain the requisite
information from the Postal Service that it needs in order to replicate its own
methodology for the allocation of Alaska non-pref air costs. However, it is to be
regretted that the time and resources of the parties and the Commission are consumed
by the stubborn refusal of the Postal Service to accept a repeated Commission
decision. The Postal Service offers no new arguments; no new facts a:s to why the
non-pref Alaska air costs should be treated by this Commission differently than it has
since 1990. The Commission’s recent ruling, Order No. 1197, makes c:lear that PRC
rules require the Postal Service to respond to the questions presented and this
Commission should not dispense it from that obligation in this case.
We therefore move to compel response to the subject interrogatories.
Respectfully
submitted,
2550 M Street, N.W.
Washington, D.C. 20037-1350
Tel: 202/457-6050
Fax: 202/457-6315
Counsel for Parcel Shippers Association
Dated: October 3, 1997
284100
-3-
CERTIFICATE
OF SERVICE
I hereby certify that I have this date served the foregoing document upon all
participants of record in this proceeding in accordance with Section 12 of the Rules of
Practice.
, cp-7
Timothy J. May
Dated: October 3. 1997